You are a free subscriber to Me and the Money Printer. To upgrade to paid and receive the daily Capital Wave Report - which features our Red-Green market signals, subscribe here. What Do You Know? More Financial Fraud...We borrow money... pump asset prices higher... and allow a heist to happen in plain sight...
Dear Fellow Traveler: Here we go again… Every decade or so, Washington, D.C., pretends to discover something obvious. This week’s revelation comes courtesy of the Washington Post editorial board… The armchair “Democracy Dies in Darkness” crew is now warning Congress not to extend expanded Obamacare subsidies without major reforms. Because… of all the fraud… Really? Fraud… in a health care subsidy program? Knock me over with a feather. If you’ve paid even passing attention to Medicare, Medicaid, or the carnival of COVID relief, you already know the pattern. A politician or regulatory body creates a firehose of automated payments. They weaken verification. They layer on political pressure to maximize “coverage numbers.” They suggest that any audit or overhaul of the program would hurt the people who need it most (because that messaging works every time, because talking points are easy to memorize… and most Americans will repeat what they hear…) And then they act surprised when tens of billions of dollars leak out of the machine. A December 3 GAO report behind the Post editorial isn’t just a warning. Here is the document… It’s a full forensic exhibit, the kind of thing that would make a career for a forensic journalist. It confirms the obvious… When you automate payments before you automate verification, you automate fraud. The best part about this is that the GAO just showed everyone how easy it was to do… GAO created 24 fake applicants across two plan years. Twenty-three were initially approved. Eighteen remained active as of September 2025... Some brokers never asked for documentation. Some processing systems “verified” fake citizenship papers. The federal Marketplace then sent more than $10,000 per month in real tax credits to insurance companies on behalf of these imaginary people. I almost respect the efficiency. Then GAO pulled the enrollment data. That is where the story becomes almost hard to believe… They found more than 29,000 Social Security numbers (SSNs) linked to more than 365 days of subsidized coverage in a single year (2023). One SSN was linked to 125 policies. They found another 58,000 SSNs that belonged to people who were dead. About 7,000 were exact matches. Another 19,000 used the SSN of a deceased person with a different name. The total payout approached $100 million… And if you want to give an inefficient system the benefit of the doubt… Consider this the biggest “where there’s smoke, there’s fire” moment… In 2023, $21 billion in tax credits went to people who never technically verified their income through the IRS… The Post notes that 35% of the Marketplace plans recorded zero medical claims in 2024. Before the government expanded the subsidies… it was just 20%. Healthy people sometimes skip care, sure… but 11 million people skipping medical care entirely… in the United States? That is not “behavior.” That’s a smoking gun of structural fraud... How Does This Happen?Look at the incentives of any program… and any participant… People think they’ve come up with a way to start skimming… but as I’ve said… Every shortcut becomes a business model… Brokers enroll people without their knowledge. Insurers get guaranteed premium subsidies. Brokers get commissions. No one files claims. No one notices. And if the “enrollee” is dead, even better. They’re not calling customer service (and if they are, we might have bigger problems.) The Post reports that Centers for Medicare and Medicaid Services (CMS) compiled 275,000 complaints last year from people who discovered they were enrolled in a plan they never selected… CMS suspended more than 800 broker IDs for suspicious activity, then reinstated most of them due to rigid enforcement rules. That tells you everything about how stupid this system is... And now the Post is worried about the cost. Extending expanded subsidies would cost an additional $350 billion over 10 years. That assumes no fraud. Add fraud, and the number grows. Gee, Why Is Healthcare So Expensive?I didn’t bring this up just because I think about the fraud… It’s that health care inflation is not some mystery. It behaves like housing, food, and electricity. It rises with monetary inflation. In those sectors, we don’t see much productivity growth. We see administrative bloat, regulatory stacking, and price floors disguised as ‘access’… or EQUALITY! These prices rise with political subsidies because demand is growing, supply is constrained, and incentives reward billing over efficiency. All the deflation we ever see in the modern economy is driven by technology. Cell phones, faster chips, better televisions. That is where prices fall. But health care lives in the inflationary world. Every subsidy expands U.S. demand, and every regulation adds a cost… Every automated payment channel becomes a target. Fraud is not the deviation. It is the logical conclusion to every program in Washington. So none of this should shock anyone. The Post didn’t suddenly become good Woodward and Bernstein on government care - in fact, it’s just a matter of time before they endorse even MORE government-run healthcare. The GAO didn’t uncover any new fraud scheme… it just followed the same pattern. This is the same pattern we see every time Washington tries to engineer affordability by pumping more money into a system that has no reason ever to get cheaper… especially in the face of rising U.S. debt, an increase in monetary supply, and demographics that will only demand more healthcare… not less. The only mystery is why anyone still pretends to be surprised. Hell, we were already losing $60 billion a year to Medicare fraud before this… Incentives win every single time… And systems perform exactly as they are designed. Every single time… Stay positive, Garrett Baldwin About Me and the Money Printer Me and the Money Printer is a daily publication covering the financial markets through three critical equations. We track liquidity (money in the financial system), momentum (where money is moving in the system), and insider buying (where Smart Money at companies is moving their money). Combining these elements with a deep understanding of central banking and how the global system works has allowed us to navigate financial cycles and boost our probability of success as investors and traders. This insight is based on roughly 17 years of intensive academic work at four universities, extensive collaboration with market experts, and the joy of trial and error in research. You can take a free look at our worldview and thesis right here. Disclaimer Nothing in this email should be considered personalized financial advice. While we may answer your general customer questions, we are not licensed under securities laws to guide your investment situation. Do not consider any communication between you and Florida Republic employees as financial advice. The communication in this letter is for information and educational purposes unless otherwise strictly worded as a recommendation. 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